“Governor Snyder decided that he was going to tax my pension. He also raised property taxes on senior citizens. ...He gave his business friends a nice tax break and he gave all us retirees a nice tax hike.”

Rocky Gonet, the Scio Township retiree featured in this ad, frets about his retirement savings following changes to the state tax code championed by Gov. Rick Snyder. “Now, I gotta scramble to make ends meet,” Gonet says, adding, “I don’t know what the future’s gonna hold.”

The claim that Snyder decided to tax pensions is true, as discussed in earlier Truth Squads. Snyder’s 2011 overhaul of the state’s tax code removed an exemption for pension income. Many retirees have complained loudly about their pensions being taxed like any other income, though the blow was softened somewhat by having the change phased in: those born before 1946 saw no change, those born from 1946-1952 get a smaller exemption, and those born after get none. Gonet, 66, falls into the middle group and pays state income taxes on a previously exempt $7,000 portion of his pension, according to a DGA press release.

The claim that property taxes were raised on senior citizens is misleading in that it gives the impression that a change on property taxes was targeted specifically to seniors. The assertion refers to another plank in the tax overhaul, which removed the homestead tax credit – the credit applied to one’s main residence – for households making over $50,000 or for homes with a taxable value of more than $135,000. Many retired Michigan homeowners could fall into this category, but the change wasn’t specifically aimed at them.

The tax changes helped make up for lost revenue from a business tax cut of $1.65 billion aimed at making the state more competitive and attractive to business. Gonet’s claim that Snyder’s “business friends” got a break while “all us retirees” got a hike is only partly true; the oldest saw their pension earnings remain exempt, and the homestead credit was only lost by certain homeowners and those households with more than a $50,000 income.

Sabrina Singh, spokeswoman for the DGA, defended the ad: “While it may be inconvenient for Rick Snyder to admit that his homestead tax credit policy punished seniors trying to get by, it pales in comparison to the burden seniors have been forced to carry because of that change and the Snyder Retirement Tax – all so that he could give tax cuts to companies, even if they ship jobs overseas.”

The Call: Foul
Seniors’ anger over the loss of the pension-income exemption is certainly borne out by the facts, though the ad overreaches. Meanwhile, the homestead exemption wasn’t targeted to seniors, as the ad implies, although many will feel it, and it will contribute to the overall tax burden for many of them. The ad receives a foul for overreaching on the pension tax and distorting who must pay added property taxes.